North Carolina’s state treasurer, Dale Folwell, issued a press release last week applauding UNC Health Care for revealing what it charges to the 727,000 people covered by the State Health Plan, which Folwell’s office oversees.
There’s just one twist: UNC actually refused to release the info Folwell requested under the Freedom of Information Act. Instead, UNC sent Folwell’s office a contract with all the relevant information blacked out. Some of the pages are nothing but pitch black rectangles.
So Folwell returned the favor by issuing the bogus thank-you note in the form of a pseudo press release, with enough blacked-out sections to confound a cryptographer.
“[Blackout] is providing a great service to the people of North Carolina,” Folwell is quoted in the release. “With this information we will be sure we’re being billed correctly. It’s the only way to be certain that taxpayers are not paying more than what was agreed to when [blackout] negotiated the rates.”
UNC said the information Folwell is seeking is not for public dissemination.
“All health care agreements between hospitals, doctors and insurance companies are proprietary business agreements, and therefore considered confidential,” UNC said in a statement. “In addition, independent audit firms routinely examine insurance contracts to ensure the correct contract rates are being applied.“
Folwell said by phone that his request exposes the perverse logic of the health care market, which functions like no other business: Prices for goods and services are a mystery, and customers are charged after the fact for services. The cost of the same procedure varies from doctor to doctor, from hospital to hospital, from one part of the state to another.
The State Health Plan is self-insured, which means that it’s on the hook for all health care expenses incurred by its members. Blue Cross merely administers the plan, which includes billing and processing claims.
The State Health Plan pays more than $250 million a year to UNC Health Care for services provided to the people it insures. Folwell said that in past years, state auditors have warned that the State Health Plan is at risk for overpaying medical claims because the costs it is contractually obligated to pay cannot be independently verified.
So in July, Folwell’s office asked UNC to disclose the fees the UNC system charges for medical services provided by UNC facilities, doctors and labs. It’s the first time Folwell tried using the Freedom of Information Act to pry the information loose.
“What we’re seeking is an understanding of not what we’re billed, but what we’re supposed to pay,” Folwell said.
The medical fees are negotiated by Blue Cross and Blue Shield, the Durham insurer that administers health insurance for the State Health Plan. UNC, which operates 13 hospitals and employs 30,000 people, said in its statement that lowering health care costs and improving care is its prime directive.
“We are concerned about the overall cost of health care in our state and nation,” the statement said. “As North Carolina’s health care system, our primary focus is to provide the highest quality care to our patients and to help improve the health of populations in our state, while keeping costs low.”
Folwell noted that UNC is hardly unique. He hasn’t seen the negotiated medical fees from any health insurer or from any medical provider that State Health Plan members use.
“The irony of this is we’re paying benefits for their employees — they’re on the State Health Plan,” Folwell said of UNC. “I thought that would be the natural place to start to ask what I’m supposed to pay.”